17 December 2012

Kenya: NSE Eyes Mining Sector With New Market Segment

The Nairobi Securities Exchange is fast tracking operations in the Growth Enterprise Market Segment(GEMS) to attract incoming players in the natural resources and mining sector.

This will help the companies listed in the segment to comply with the law that requires them to issue at least 35 per cent of the shareholding to local investors.

NSE, chief executive, Peter Mwangi said this will also be a good platform for the firms to raise capital for their operations. NSE last week approved and announced registration of four nominated advisors (Nomads) and eight authorized representatives to the NSE Growth Enterprise Market Segment.

"The Nomads will assist companies to list on growth segment and to comply with good corporate governance practices,"he said. The advisors selected are Burbidge Capital,Emerging Africa Capital ,NIC Capital and Standard and Mutual Limited.

"We believe that GEMS provides an opportunity for firms participating in Kenya's natural resources and mining sector to raise capital and also comply with the 35 per cent local equity component under Legal Notice No. 118," Mwangi said while officiating the listing of Umeme Holdings, Uganda's power distributer, in the Kenyan bourse. Umeme, which was listed by introduction, after its IPO anmd subsequent listing in Uganda, is the first foreign company to list in the local market.

NSE has been undergoing major changes in a bid to boost investor confidence which has in turn seen many companies show interest in listing.

With the recent launch of the Broker Back Office system, the entire process of transacting in securities has minimal manual intervention and is interfaced with the trading and settlement platforms.

The Chief Executive noted this this reduces the risk of trading in securities listed on the Exchange and also enabling internet trading. The system also improves the integrity of the exchange trading system and facilitates greater access to our securities markets.

The NSE is also warming up for the introduction of Real Estate Investment Trusts (REITS)as an alternative investment. " This will provide Kenyan investors with an opportunity to invest in the Real Estate sector without requiring large sums of money," Mwangi said.

The bourse is preparing for demutualisation, slated for mid 2013. Demutualisation would give the NSE a greater self-regulatory role and allow it to raise capital from the market. The shareholders approved the listing of the NSE by introduction of the NSE on the Alternative Investment Market Segment (AIMS). It has since appointed of transaction advisors for this self listing.

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